The stock brokerage firm of former Philippine Stock Exchange (PSE) chairman Harry Liu was slapped in an audit report by the SEC last October that showed initial findings of trading irregularities.
The SEC said based on the available records, Summit was found to have engaged in cross trading (buy and sell) transactions in LTHI which created the false impression that it was actively traded in the stock market.
Under the Sec. 55 of the Securities Regulation Code (src), parties being investigated and/or charged may propose in writing an offer of settlement with the Commission at any time during the probe. Upon receipt of the offer, the SEC may then consider the offer based on timing, the nature of the investigation or proceeding, and the public interest.
The settlement offer has a precedent in the case of listed aluminum maker Reynolds Philippines Corp. (RPC), whose officials were likewise tagged in trading anomalies last year. The SEC accepted the settlement offer last May, pegging it at P100,000 per individual or a total of P500,000.
SEC chairperson Lilia Bautista said there is still no assessment on the extent of the settlement but the Commission is willing to consider the offer — to save time, and on lawyers’ fees as well.
The examination was promoted primarily by reports of unusual transactions in the seldom-traded LTHI, which rose into one of the most active issues from June to August this year after a series of cross sales led by Summit itself.
Interestingly, the brokerage firm holds a substantial 9.91 percent stake in the still inoperational telecoms company. Aside for owning Summit, Liu, the PSE chairman from 1998 to 1999, is also a director in the 15-man PSE Board and is chairman of the Association of Securities Analysts of the Philippines.
The disputed sale involved some 485 million shares — or about 38 percent of the company’s outstanding capital — jointly owned by LTHI’s three biggest shareholders: chairman and president Raymond Moreno, senior vice president Edgardo Quiogue; and executive vice president Rene Jose Domingo.
Meanwhile, the buyers listed were 14 different companies: Moredel Homes, Viswa Ventures, Akshra Resources, JRLT Holdings, AJAR Holdings, ARJA Holdings, RAAJ Holdings, JORU Holdings, JRAA Holdings, San Isidro Assets, Cassandra Conglomerate, Oceanus Conglomerate, Seven Seas Holdings, and Four Devas Assets. — Conrado Diaz Jr.